N.Y. AG settlement yields restitution for restaurant workers

By Bryan Cohen

NEW YORK (Legal Newsline) – New York Attorney General Eric Schneiderman announced a settlement on Tuesday with Veranda, a restaurant and lounge in Manhattan, resolving allegations that it allegedly underpaid workers and unjustly terminated employees.

Veranda must pay $150,000 in restitution for approximately 25 employees who were allegedly paid below the minimum wage and did not receive overtime. In addition, the business must pay $50,000 in restitution for lost wages, damages and penalties for allegedly wrongfully terminating two employees who questioned the company’s pay practices.

“By scaring employees into silence, employer retaliation undermines basic labor law protections,” Schneiderman said. “Now Veranda will be held accountable for violating the laws that protect our state’s most vulnerable workers. My office will aggressively pursue employers who fire workers for standing up for their rights — especially during tough economic times, when so many workers are already afraid of losing their jobs.”

The minimum wage is $7.25 in New York and employers must pay workers 1.5 times their regular pay rate for each hour they work past 40 in a given week under the terms of the state’s overtime requirement. If certain conditions are met precisely, employers are allowed to pay a tipped employee a slightly lower rate for an hourly wage. Managers and those who do not serve the public are not allowed to take a portion of tips received.

It is illegal for employers to retaliate against workers who report labor law violations. The Wage Theft Prevention Act, which became effective in April, created added remedies for workers who were retaliated against, including liquidated damages of as much as $10,000 for each instance of retaliation. A major portion of the settlement attributed to retaliation is based on the new remedies that became available under the new act.

Schneiderman’s office alleged that Veranda failed to pay many employees overtime and the minimum wage and that the business illegally gave tips to the manager. In addition, Veranda allegedly fired two employees after they participated in a group complaint about the company’s pay practices that was made to the Make the Road New York advocacy group. The group later referred the case to Schneiderman’s office.

Under the terms of the agreement, the Greenwich Village-based Veranda may not retaliate against employees perceived to have cooperated in the case or employees who receive wages that were unpaid as part of the settlement. Additionally, the restitution amount reimburses employees for tips that were taken by the club manager. Schneiderman’s office will continue to monitor the employment practices at Veranda for the next two years.